Forum Archive Index - May 2000

["Matthew Van Veen" <mattvanveen@hotmail.com>]

I am sure I would pay $2 plus to keep seeing ELLE MCPHERSON in hers - but 
thats just me??

>From: "tennyson@caverock.net.nz" <tennyson@caverock.net.nz>
>Reply-To: sharechat@sharechat.co.nz
>To: sharechat@sharechat.co.nz
>Subject: Re: [sharechat] Ceramco
>Date: Wed, 31 May 2000 17:01:46 +0000
>
> >
> > They sent out a notice of meeting yesterday
> > I seem to get a value over $2 with $36m of cash and the Bendon
> > business
> >
> > Anyone know anything about it
> >
>Jim I am interested as to how you got your valuations.   Perhaps you
>would like to critique mine?
>
>The way I see it, the value of Ceramco rests on the value of what
>will become of  'Bendon' after all the China Clays stuff is sold off.
>    Bendon is a clothing company with a strong brand name, so I asked
>myself, what sort of P/E ratio could we expect from a stand alone
>company like that?   There is nothing to compare it to that remains
>listed in New Zealand and if you look to Australia most of the listed
>rag trade shares seemed to be combined retailers/manufacturers.   But
>with Bendon's recent purchase of a bankrupt chain of lingerie shops,
>maybe they are looking to become an integrated retailer/manufacturer
>too.    I found it difficult to ferret out information on comparable
>Australian companies who are making a profit-' Countryroad' has made
>losses for the last two years.   'Just Jeans' is in profit but
>trading on a P/E ratio of only 6.5.     Bendon itself, when last
>listed as an independent company traded on a P/E of 12 in 1987, just
>before the share crash of  that year.   Let's say an appropriate P/E
>for Bendon to trade at is 8.    Sounds modest but that is 20% better
>than anything I can find as a near equivalent in Australia.
>
>Bendon forecast EBIT of 7.9million in the 2001 financial year.   This
>is based on no material increase or decrease in the value of the
>dollar against other major currencies-  That is a flawed assumption
>as the $NZ has crashed around 10% vs the $US since early April.  They
>are also forecasting no material change in the existing general
>economic conditions in Australaia and NZ.    Wrong again, as GST is
>expected to significantly affect clothing sales in Australisa this
>year.   So I would adjust this forecast down to around 7 million to
>take into account these factors.    This gives EBIT of around
>7million and I reckon with all the restructuring going on, the
>Ceramco accountants will be clever enough to see them pay no tax
>in the  2001  year.    So we get a market valuation of $56million for the
>company, which divided by the 30.33 million remaining shares gives a
>valuation of $1.85 per share.
>
>Now for every  4  Ceramco shares you hold now, you will get 3 of
>these new shares plus $1.59 cash.    This gives a theoretical on
>market price for Ceramco today of (3(1.85)+1.59)/4=$1.78.
>
>Earlier today Ceramco was trading at $1.72, or just below what I am
>calling 'fair value'.    Anyone agree, disagree or have any other
>useful comments to add? SNOOPY
>
>
>---------------------------------
>Message sent by Snoopy
>e-mail  tennyson@caverock.net.nz
>on Pegasus Mail version 2.55
>----------------------------------
>"You can tell me I'm wrong twice,
>but that still only makes me wrong once."
>
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